A company that treats tainted wastewater from oil and gas operations has agreed to pay a $50,000 civil penalty, after state regulators determined that it failed to update its permitting information.

Danish Flats Environmental Services was formerly exempt from Utah’s Operating Permit Program because its annual emissions of certain pollutants were well below state thresholds, according to Utah Division of Air Quality (DAQ) Compliance Branch Manager Rusty Ruby.

“Initially, they came to us with emissions numbers, and they were less than what we require,” Ruby said Aug. 11.

But a periodic review of the company’s operations found that those emissions increased over time as its business picked up, and the DAQ later determined that the Danish Flats Environmental was in violation of state code.

“We sent them a note saying, ‘Hey, it looks to us like you might be out of compliance. What’s your side of the story?’” Ruby said.

In response, the company reported last October that its open-air evaporation pond operations near Cisco now emit more than 5 tons of specific pollutants per year, according to Ruby.

“It appeared to us that maybe what we reviewed initially as a ‘small-source exemption’ had maybe gone beyond that, and that’s the case,” he said.

According to a memo from DAQ Director Bryce Bird, the Colorado Springs, Colorado-based company did not submit a notice of its plans to expand its operations. Nor did it obtain state approval before it began construction work on that expansion, Bird’s memo says.

Danish Flats also failed to apply for a state operating permit under Title V of the federal Clean Air Act within one year of the time that it became subject to those requirements, according to the memo.

To resolve those alleged violations, the DAQ initially proposed that the company could pay a civil penalty of $84,000. But Danish Flats said it could not afford that amount, based on a U.S. Environmental Protection Agency (EPA) model that calculates an alleged violator’s ability to pay penalties.

The company calculated that the final $50,000 penalty is also beyond its affordability range, but it volunteered to pay that lesser amount, according to Ruby.

“They said, ‘We’re out of compliance; we want to do the right thing,’” he said.

In the months since that time, however, the company’s business has declined considerably, according to Grand County Technical Inspector Lee Shenton.

When Shenton visited the site last month, he learned that the company was only bringing in about 10 trucks per day.

“[That] is pretty low for them,” Shenton said.

According to Ruby, a DAQ employee reported this week that it doesn’t look like there has been any truck traffic on the site in some time.

“I think there was a boom and bust period,” Ruby said.

Danish Flats Environmental Services Operations Manager Justin Spaeth did not respond to a telephone request for comment this week.

But he told The Times-Independent in 2012 that the facility has always operated within state guidelines, and that it would continue to do so.

The company’s website also says that its commitment to environmental compliance is “second to none.”

By signing the settlement agreement, the company does not admit that it violated the state’s air quality rules in this instance. But the allegations will remain on record “for any purpose for which such history is relevant to the DAQ,” according to Bird’s memo.

Under the terms of the settlement, Danish Flats will submit four payments of $12,500 — including an initial payment that will be due within 20 days of the Utah Air Quality Board’s Aug. 6 decision to approve the agreement.

Moving forward, the company will operate under a new administrative order that Bird approved on Aug. 4.

The order sets revised emissions at maximum annual levels of 5.86 tons of nitrogen oxides, 4.35 tons of carbon monoxide, 1.06 tons of sulfur dioxide and 58.54 tons of volatile organic compounds. Emissions of other pollutants are also regulated under Bird’s order.

Danish Flats currently operates a total of 14 evaporation ponds at its site about three miles north of Interstate 70 Exit 212, according to the DAQ.

The company pre-treats “produced” wastewater from oil and natural gas operations inside separation tanks and other facilities before it enters the ponds, thereby removing contaminants such as hydrocarbons. The treated water is then pumped into the ponds, where salts and other contaminants evaporate.

The facility began its operations in April 2008, and since that time, it has fallen out of compliance with state and county regulations on several occasions.

In 2009, for instance, Grand County imposed a $2,600 fine on the company, after officials determined that it built a new evaporation pond without prior approval from the county council.

Two years later, the DAQ found that emissions from the facility exceeded state thresholds in some cases.

Danish Flats Environmental Services CEO Jim Bradish said at the time that the company is “very cognizant of the environment,” and added that it was working to resolve the issue.

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